BUS 101 Practice Final Exam
Manufacturers rarely emphasize packaging because this aspect of the product has little relevance to a customer's decision-making process. a. True b. False
False
No firm can determine upfront how much money it needs to make for each item it sells. a. True b. False
False
The Fair Labor Standards Act of 1938 mandated that men and women doing equal jobs receive equal pay. a. True b. False
False
The date a bond comes due is called its record date. a. True b. False
False
The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission. a. True b. False
False
The two key aspects of product quality are level and longevity. a. True b. False
False
A firm's _____ include cash and other assets expected to be converted into cash in the following year. a. current assets b. fixed assets c. tangible assets d. capital assets
a
A health and fitness startup company goes for an initial public offering. For assistance, it enters into a firm commitment arrangement with an investment bank. As per the agreement, the investment bank itself will purchase all the shares at a specified price. This will guarantee that the company will receive a fixed amount of new funds. This scenario exemplifies a(n) _____. a. underwriting b. proxy selling c. follow-on offering d. corporate spin-off
a
A business email should have a compelling subject line. a. True b. False
True
A budgeted income statement is a detailed forecast of future cash flows that helps financial managers identify when their firm is likely to experience temporary shortages or surpluses of cash. a. True b. False
False
A limited partnership is an agreement between two or more individuals to operate a business as co-owners for a limited period of time. a. True b. False
False
Demographic segmentation refers to dividing the market based on where consumers live. a. True b. False
False
In the context of monetary policy, the money supply includes credit cards. a. True b. False
False
In the context of self-reliance, people with an external locus of control rely more on their own efforts and less on the actions of others. a. True b. False
False
It is possible to establish a corporation by a simple verbal agreement. a. True b. False
False
A job description is an explanation of the responsibilities for a specific position in an organization. a. True b. False
True
A limited liability company (LLC) can elect to be taxed as a corporation. a. True b. False
True
An advantage of starting a business from scratch is that the entrepreneur has the freedom to use his or her own ideas and concepts. a. True b. False
True
Each person in a line organization is directly accountable to the person immediately above. a. True b. False
True
Each year, the Federal Open Market Committee holds eight regularly scheduled meetings to make decisions about open market operations. a. True b. False
True
In a cellular layout, cells are designed to be operated by a few workers who perform a wider array of tasks than assembly-line workers. a. True b. False
True
In the context of modes of transportation, ships have limited availability. a. True b. False
True
In _____, firms either acquire foreign firms or develop new facilities from the ground up in foreign countries. a. direct investment b. a strategic alliance c. foreign franchising d. countertrade
a
In the context of budget preparation, which of the following is a disadvantage of participatory budgeting? a. It can lead to budgetary slack. b. It fails to motivate middle and first-line managers. c. It results in an inadequate representation of the issues faced by individual departments. d. It fails to identify the resources needed to achieve goals.
a
In the context of communication barriers, _____ can range from a document that looks like a wall of type to a room that's freezing cold. a. physical barriers b. language barriers c. perceptual barriers d. organizational barriers
a
In the context of employee selection, the main categories of employment testing include _____. a. drug testing b. grey-box testing c. stress testing d. acceptance testing
a
In the context of short-term financing, which of the following statements is true of a factor? a. It buys the accounts receivables of other firms. b. It is a requirement lenders impose on borrowers as a condition of loans. c. It is the mix of equity and debt financing a firm uses to meet its permanent financing needs. d. It requires firms to maintain their own collection department.
a
Osmectes Corp. has included a feature in its website that enables its employees to receive help from other employees. This support system allows employees to provide information and guidance to others. Employees can seek help regarding any work-related issue through this system. In this scenario, Osmectes Corp. is using _____. a. Enterprise 2.0 b. a cybermediary c. InterNIC d. Internet2
a
Small firms tend to be effective innovators for a number of reasons. Most importantly, their very reason for being often ties to: a. a brand-new idea. b. a large span of control. c. a search for crowdfunders. d. the presence of bureaucracy.
a
Businesses adopt and identify target markets for their products to: a. coerce people into buying products they do not need. b. maximize the impact of the cost of marketing. c. adopt consumer-friendly pricing strategies such as price skimming for new products. d. collect information from the external marketing environment.
b
Consumers tend to view sponsorships in a positive light because: a. they allow the consumers to get a first-hand experience of a product. b. they are clearly connected to events that matter to the target audience. c. they do not involve any form of transaction in either cash or kind. d. only the premium brands opt for sponsorship.
b
Demi loves playing online games. She surfs through many websites to find new, interesting games. One day she finds that her mailbox is filled with emails suggesting websites for online games and ads promoting a few online offers. In this scenario, a(n) _____ tracks Demi's computer behavior to send her targeted mails and ads. a. firewall b. spyware c. bastion host d. attack tree
b
Graham's Choicest is a popular brand of dairy products. The brand plans to introduce two new flavors of milkshakes in the market. Before starting the production and manufacturing of the new products, the company asks mall visitors in three different locations to try out the samples of its new offerings and give their feedback. In the given scenario, Graham's Choicest is most likely in the _____ stage of the new product development process. a. development b. testing c. commercialization d. idea screening
b
In the context of international trade restrictions, _____ are limitations on the amount of specific products that may be imported from certain countries during a given time period. a. tariffs b. quotas c. voluntary export restraints d. embargoes
b
Moat & Meet, a travel agency, wants to widen its customer base. It adopts a strategy that allows customers to visit their favorite destinations through a virtual reality (VR) machine before visiting the place in person. In this context, which dimension of the business environment is affected the most? a. The social environment b. The technological environment c. The political environment d. The global environment
b
The management of McCord Corp. makes an announcement that the top three employees of the firm will be rewarded with expensive gifts at the end of the month. These employees will be selected on the basis of their performance. Following the announcement, all the employees start putting in more effort by working extra hours and improving the quality of their work. In this scenario, McCord uses _____ to motivate employees. a. job enrichment theory b. expectancy theory c. Theory X d. equity theory
b
Brestine Inc., a European multinational corporation, wants to expand its customer base and decides to target the Asian market. As most Asian countries have comparatively low per capita income, the company introduces cheaper versions of its products that would appeal to the target market. In this scenario, Brestine Inc. is most likely facing the barrier of _____. a. sociocultural differences b. political differences c. economic differences d. legal differences
c
In the context of the income statement of an organization, accountants use accrual-basis accounting when recognizing _____. a. debts b. investments c. revenues d. cost of shares
c
Kiddiecon, a company that manufactures stationery products for children, signs a contract with an animation studio to use one of its popular cartoon characters as a design on its school bags. Kiddiecon's contract with the animation studio is an example of _____. a. a divesture b. cobranding c. licensing d. an acquisition
c
In-person presentation is a communication channel with high channel richness. a. True b. False
True
Money market mutual funds raise money by selling shares to large numbers of investors. a. True b. False
True
The prices of unsought products vary wildly. a. True b. False
True
When conflicts arise between the long-term interests of owners and those of other stakeholders, the fiduciary duty required of financial managers generally leads them to make decisions that are most consistent with the interests of ownership. a. True b. False
True
Your target market is the group of people who are most likely to buy your product. a. True b. False
True
A public accounting firm takes up a contract to perform an external audit for an oil manufacturing company. The firm, however, is already in a consulting contract with the oil company. Because of its prior association with the oil company and the hefty fee the oil company pays the firm, the firm manipulates the audit report. Which of the following laws is violated in this scenario? a. The Sarbanes-Oxley Act b. The Blaine Act c. The Landrum-Griffin Act d. The Dawes Act
a
Adhering to a new act passed in 2002, the CEO of Pearsil & Pearsil, a real estate company, now personally certifies the validity of the company's financial statements. Given this information, the CEO most likely follows the_____. a. Sarbanes-Oxley Act b. Blaine Act c. Landrum-Griffin Act d. Dawes Act
a
Chestelle Corporation, a sports equipment manufacturing company, borrows a considerable sum of money as loan from GRJ Bank, a private bank, at a time of financial crisis. The corporation has four years to repay the principal amount along with the interest to the bank. In this scenario, the money that Chestelle Corporation owes the bank represents its _____. a. long-term liability b. accumulated depreciation c. owners' equity d. bequest value
a
Donton Inc. dominates its market section by offering a wide range of office supplies that includes printers, furniture, and cleaning supplies to final consumers. It is evident that Donton Inc. is a _____. a. category killer b. department store c. supermarket d. supercenter
a
Grydon Inc. has applied for a business loan in the United Bank. To best assess the loan case, the loan officer at the bank, Cerejo, decides to look at the company's net income. Cerejo will find this information in Grydon's _____. a. profit and loss statement b. statements of cash flow c. stockholders' equity statement d. statement of retained earnings
a
Temont Esson, a pharmaceutical company, saw a drastic increase in its sales in 2016 when compared to 2015. A survey showed that the growing percentage of the elderly was directly responsible for improving the company's sales. Identify the dimension of the social environment that this scenario exemplifies. a. Aging population b. Diverse workforce c. Social responsibility d. Ethical policy
a
The government of Brunasia issues bonds with a guarantee to make periodic interest payments on the par value. The government offers a 6.5% interest on its bonds. In this case, the percentage of interest offered by the government of Brunasia is called the _____. a. coupon rate b. dividend c. premium d. capitalization rate
a
Which of the following is the most costly form of foreign direct investment? a. Offshoring b. Franchising c. Importing d. Licensing
a
Which of the following statements best defines the producer price index (PPI)? a. It measures the change over time in the prices that businesses pay each other for goods and services. b. It refers to the quantity of products that consumers are willing to buy at different market prices. c. It measures the change in weighted-average price over time in a consumer market basket of goods. d. It refers to a standard equation that is used to determine the resources needed to produce a certain quantity of goods.
a
Which of the following statements is true of enterprise resource planning (ERP) systems? a. They help manage activities along an entire value chain. b. They are inexpensive and easy to implement. c. They require users to enter and access data in traditional ways. d. They are the software version of the critical path method.
a
Which of the following tools is most frequently used by the Fed to expand and contract the money supply in the economy? a. Open market operations b. Credit default swaps c. Endowment mortgages d. Steering taxes
a
_____ is a spontaneous financing granted by sellers when they deliver goods and services to customers without requiring immediate payment. a. Trade credit b. A revolving credit agreement c. Commercial paper d. A line of credit
a
_____ means buying products domestically that have been produced or grown in foreign nations. a. Importing b. Franchising c. Outsourcing d. Licensing
a
_____ refers to the physical components used to collect, input, store, and process data, and to display and distribute information. a. Hardware b. Software c. An operating system d. An execution unit
a
Delvry Inc. is a solid fuel supplier. It supplies coal to different thermal power plants. The company takes legal possession of the coal, and they hire outside transporters to aid the delivery process. In this scenario, Delvry Inc. is a(n) _____. a. agent b. drop shipper c. broker d. full-service merchant wholesaler
b
Harry is one of the top managers in RPLD Corporation. He, along with seven other members, takes the major decisions of the company and oversees its operation. Although Harry is not the owner of the corporation, he holds stocks in the company and has the power to appoint a chief executive officer (CEO) for the company. In this scenario, Harry is part of the _____ of RPLD Corporation. a. board of valuers b. board of directors c. board of corporators d. board of regents
b
In the context of a SWOT (strengths, weaknesses, opportunities, and threats) analysis of a company, which of the following is an example of an external opportunity? a. Lower costs and higher profit margins b. New social trends in the market c. Greater restrictions on trade in foreign markets d. Aggressive competition in the same industry
b
MVJ Corp., a market research firm, borrowed $2 million from Trimitium Bank. While negotiating with the bank, the firm signs a promissory note, which specifies that the firm must pay the borrowed amount in 90 days with interest. However, the bank also requires the firm's inventories and receivables to be pledged as collateral to back the loan. Which of the following short-term financing options is being offered by Trimitium Bank in the given scenario? a. Spontaneous financing b. Short-term bank loans c. Bank debit d. Factoring
b
Which of the following statements is true of licensing? a. The core brand is partially responsible for financially supporting the company seeking the license. b. It involves a payment of fee to the core brand. c. All the benefits of a licensed product go to the core brand, and the core brand enjoys limited liability. d. The core brand takes on negligible risks in the licensing agreement.
b
Which of the following statements is true of the Dodd-Frank Act? a. It played a major role in the U.S. economic meltdown of the first decade of the 21st century. b. It required large firms in the financial sector to hold more equity and less debt in their capital structures. c. It weakened government oversight of financial markets. d. It required large firms in the financial sector to increase their debt-to-equity ratio.
b
With an increasing number of workers facing challenges such as raising kids and caring for elderly parents, responsible companies are stepping in with programs such as on-site day care, company-sponsored day camp, and referral services for elder care. These actions show that these companies are fulfilling their _____. a. stakeholder criterion b. social responsibility c. legal obligation d. fiduciary duty
b
_____ provide analysis and prepare reports and financial statements for their organization. a. Public accountants b. Management accountants c. Government accountants d. Forensic accountants
b
_____ refers to Federal Reserve decisions that shape the economy by influencing interest rates and the supply of cash. a. Fiscal policy b. Monetary policy c. Revenue policy d. Deficit policy
b
_____ refers to the programs that provide instructions to a computer so that it can perform a desired task. a. Hardware b. Software c. Intranet d. Extranet
b
A-n-Y dominates its market section by offering a wide range of toys that includes soft toys, plastic construction toys, electronic toys, and board games to the public. It is evident that A-n-Y is a _____. a. supermarket b. department store c. category killer d. supercenter
c
Debbilie, a chain of retail cosmetic stores, offers loyalty cards to its regular customers. The cardholders can earn points and get discounts for the purchases they make at any of the company's stores. In the context of the evolution of marketing, which of the following eras does this scenario most likely refer to? a. The selling era b. The production era c. The relationship era d. The marketing era
c
In the context of debt financing, if a firm invests the borrowed funds profitably, the use of debt can improve the _____ to the shareholders by not diluting existing shares of stock. a. total contract value b. resource rent c. return on equity d. gross profit
c
In the context of the characteristics of good information, when information is accurate, it means that it is: a. available in time to make a difference. b. able to help users grasp its meaning. c. free of errors and biases. d. secure from hackers.
c
In the context of the history of American business, which of the following statements is true of the production era? a. Major businesses focused on shifting the balance of power from producers and toward consumers. b. The method of hard sell was eliminated. c. The assembly line became standard across major manufacturing industries. d. Leading-edge firms looked beyond each immediate transaction with a customer and aimed at building a long-term relationship.
c
Investors using a(n) _____ often invest in stocks of relatively new companies with innovative products in a hot sector of the economy. a. investing for income strategy b. value investing strategy c. investing for growth strategy d. buy-and-hold strategy
c
Lawrence recently bought a new luxury car, but he is not completely satisfied with it. He now wishes he had bought something that would have made a better impression on his colleagues. Lawrence's friend Howard, on the other hand, bought a secondhand sedan and is extremely happy with it. Howard becomes even more proud of his purchase when his friends compliment his car. From the marketing point of view, which of the following concepts has contributed to Howard feeling satisfied with his car? a. The residual value of the car b. The actual value of the car c. The perceived value of the car d. The salvage value of the car
c
Megan wants to start a company that makes handmade products. She has limited capital, and she does not want to spend it on maintaining a large inventory of raw materials. She plans to maintain only two weeks' worth of stock of finished goods as she does not want to end up with a large inventory of products that may not sell. Which of the following production systems would be most suitable for Megan's company? a. The push system of inventory control b. The mass production system c. The just-in-time production system d. The continuous production system
c
Saffexo, a company that manufactures sports goods, hikes the prices of its entire range of athletic shoes. However, the company does not experience a fall in the sales of its shoes following the hike as the consumers continue to buy them. The information given in the scenario indicates that Saffexo has a good _____. a. brand valuation b. product consistency c. brand equity d. product mix
c
Timoth Steels, a steel manufacturing company, wants to install a new factory in Temenia. The company decides to use funds from its own account and refrain from borrowing money from banks. Which of the following sources of long-term funds is being used by Timoth Steels in the given scenario? a. Term loans b. Corporate bonds c. Direct investments from owners d. Long-term debt
c
Which of the following is a difference between corporate philanthropy and corporate responsibility? a. Unlike corporate philanthropy, corporate responsibility focuses on donations in the form of employee time. b. Unlike corporate philanthropy, corporate responsibility begins with a partnership between a business and a nonprofit. c. Unlike corporate philanthropy, corporate responsibility focuses on the actions of the business itself rather than donations. d. Unlike corporate philanthropy, corporate responsibility focuses on donations in the form of money and products.
c
Which of the following is a major challenge faced by most human resources departments? a. Refraining from documentation to avoid employee lawsuits b. Maintaining a high ratio of young workers to old workers c. Being considered irrelevant by many employees d. Receiving lesser pay than the trainees of other departments
c
Which of the following is a negative factor that interferes with the effectiveness of socialist economic systems? a. Excessive private ownership of healthcare services b. Absence of a tax structure c. Inefficiencies and corruption d. Lack of government ownership of key enterprises
c
Which of the following is an issue associated with general partnerships? a. Complexities related to the formation of the company b. Double taxation of the partners c. Difficulty faced by a partner when withdrawing from the company d. Weaker financial base when compared to that of a sole proprietorship
c
Which of the following practices is recommended for an effective business presentation? a. Introducing key ideas toward the end of the body of the presentation b. Avoiding graphs and charts in the presentation c. Citing trusted sources, specific data, and expert quotations d. Avoiding specific examples and vivid comparisons
c
A firm's _____ refers to its holdings of currency plus demand deposits. a. inventory b. accrue c. debt d. cash
d
In the context of consumer promotion tools, _____ entice consumers with cash-back offers and act as purchase motivators for higher-priced items. a. samples b. coupons c. premiums d. rebates
d
In the context of open-end mutual funds, the net asset value per share (NAVPS) is computed by: a. dividing the total value of the fund's cash, securities, and other assets by the value of the coupon rate and the firm's liabilities. b. dividing the capital gains by the number of fund shares outstanding. c. dividing the accumulated value of the fund's assets by the current yield. d. dividing the total value of the fund's cash, securities, and other assets by the number of fund shares outstanding.
d
In the context of operations management, for the first 25 years after World War II, which of the following was true of the United States? a. It had a severely damaged infrastructure. b. It lacked natural resources. c. It had a socialist economy. d. It had an increasingly well-educated labor force.
d
In the context of the social environment of business, which of the following is likely to happen as the American population rapidly ages? a. Companies with older employees are less likely to find innovative ways to reach the aging consumer market. b. Companies in fields such as healthcare, pharmaceuticals, and travel will clearly decline. c. With a smaller labor pool, companies will not need to compete for top talent. d. Creative companies will reimagine their current products to serve older clients.
d
Lily, a salesperson at a clothing store, observes the department head misbehaving with a customer. She brings the issue to the notice of the store manager, and the offender is immediately dismissed from his job. In this scenario, Lily is a _____. a. social auditor b. corporate philanthropist c. grandstander d. whistle-blower
d
Lydia sells her ancestral property for a handsome amount of money. She invests this money in various securities. She decides not to trade the securities for a while and lets her money increase with the growth of the overall market. However, after almost eight years, when she feels that the value of the securities has risen considerably, Lydia sells her stocks and receives high returns on her investment. In this scenario, Lydia has used the _____ investment strategy. a. market timing b. investing for growth c. value investing d. buy-and-hold
d
The advantage of electronic communication networks (ECNs) is that they: a. allow traders to contact the market makers used in the over-the-counter market. b. help firms identify and contact accredited investors. c. guarantee the sale of all the securities of listed firms. d. make it possible for investors to trade securities after the U.S. exchanges are closed.
d
The banking panic of 1907 in the United States created pressure for Congress to find a way to stabilize the nation's banking system. The result was the: a. Revenue Act of 1916. b. Future Trading Act of 1921. c. Securities Exchange Act of 1934. d. Federal Reserve Act of 1913.
d
The biggest advantage of publicity is that: a. it has negligible possibilities of negative repercussions. b. it allows for personal interactions between a company and its customers. c. the marketer has control over how the news is presented by the media. d. it is usually credible.
d
The difference between the prices at which securities dealers buy and sell a security is called _____. a. a capital gain b. price dispersion c. thrift d. the spread
d
The extent to which decision-making power is held by a small number of people at the top of the organization is known as _____. a. the span of control b. power distance c. monopoly d. the degree of centralization
d
Which of the following elements is a personal influence on the consumer decision-making process? a. Culture b. Family c. Friends d. Demographics
d
Which of the following statements is true of people with an external locus of control? a. They are extremely self-reliant. b. They validate their own efforts. c. They take complete control of their lives. d. They feel buffeted by the actions of others.
d
Which of the following statements is true of product-use-based market segmentation? a. It helps product industries that are clustered in certain areas. b. It includes both the benefits that consumers seek from products and how consumers use the product. c. It can incorporate countries, cities, or population density as key factors that affect products. d. It helps small companies in narrowing the target markets for their products.
d
Which of the following statements is true of the formation of a partnership? a. Working out the details of a partnership agreement is always a simple process. b. Forming a partnership requires issuance of fresh stock to the public. c. Partnerships are created by filing a document called the articles of organization. d. Partnerships can be established based on a simple verbal agreement.
d
Which of the following statements is true of the wage gap between CEO pay and worker pay in the United States? a. In 2011, CEO pay was correlated to the employment rate. b. In 2014, investors lost control over executive compensation. c. In 2014, the average American CEO earned 500 times what the average worker earned. d. In 2011, CEO pay was correlated to how well companies fared in the stock market.
d